2 for S1 Finance Prasetiya MulyaMay 2014Learning ObjectivesExplain why information systems are vulnerable to destruction, error and abuseDescribe the business value of security and controlDescribe the components of an organizational framework for security and controlv

4 Threat Capabilities Threats today are more dangerous and easier to useMay 2014Threat CapabilitiesThreats today are more dangerous and easier to useThreats continue to become more sophisticated as the technical knowledge required to implement attacks diminishesv

5 Security vs. Controls Security Controlsfor S1 Finance Prasetiya MulyaMay 2014Security vs. ControlsSecurityControlsPolicies, procedures, and technical measuresused topreventunauthorized access, alteration, theft, or physical damageto information systemsMethods, policies, and organizational proceduresthatensure safety oforganization’s assets;accuracy and reliability ofits accounting records;and operational adherence tomanagement standardsThis slide introduces the need for both security and controls in today’s businesses in order to safeguard information systems. Ask students to give an example of security technique and an example of a control that might be used in a business.Security:Policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systemsControls:Methods, policies, and organizational procedures that ensure safety of organization’s assets; accuracy and reliability of its accounting records; and operational adherence to management standardsv

6 Why Systems are Vulnerable?for S1 Finance Prasetiya MulyaMay 2014Why Systems are Vulnerable?Accessibility of networksHardware problems (breakdowns, configuration errors, damage from improper use or crime)Software problems (programming errors, installation errors, unauthorized changes)DisastersUse of networks/computers outside of firm’s controlLoss and theft of portable devicesA computer security risk is any event or action that could cause a loss of or damage to computer hardware, software, data, information, or processing capabilityThis slide discusses the main categories of threats to information systems. Note that when large amounts of data are stored digitally, on computers and servers and in databases, they are vulnerable to many more kinds of threats than when they were stored in manual form, on paper in folders and file cabinets. When data are available over a network, there are even more vulnerabilities. Ask students if they have ever lost data on their computers. What was the reason (hardware, software, “disaster,” other people, etc.). On the other hand, digital records are not vulnerable in ways that manual records in a file cabinet are vulnerable. For instance, you really can’t tell who has accessed manual records, or when, in a physical file. In a database, file access is monitored (unless a hacker has found a way to read records without leaving a digital trail).v

7 Internet Vulnerabilitiesfor S1 Finance Prasetiya MulyaMay 2014Internet VulnerabilitiesNetwork open to anyoneSize of Internet means abuses can have wide impactUse of fixed Internet Addresses with cable/DSL modems creates fixed targets for hackersUnencrypted VoIP, P2P, IMInterceptionAttachments with malicious softwareTransmitting trade secretsNetwork ReconnaissanceThe overall act of learning information about a target network by using publicly available information and applications.Methods to accomplish:Ping sweepsPort scansInternet information queriesThis slide discusses the types of threats that large public networks, such as the Internet, face because they are open to virtually anyone. Note that Internet is so huge that when abuses do occur, they can have an enormously widespread impact. And when the Internet becomes part of the corporate network, the organization’s information systems are even more vulnerable to actions from outsiders.v

8 Wireless Security Challengesfor S1 Finance Prasetiya MulyaMay 2014Wireless Security ChallengesRadio frequency bands easy to scanSSIDs (Service Set IDentifiers)Identify access pointsBroadcast multiple timesCan be identified by sniffer programsWar drivingEavesdroppers drive by buildings and try to detect SSID and gain access to network and resourcesOnce access point is breached, intruder can use OS to access networked drives and filesThis slide discusses security threats related to wireless networks. Local-area networks (LANs) using the standard can be easily penetrated by outsiders armed with laptops, wireless cards, external antennae, and hacking software. Hackers use these tools to detect unprotected networks, monitor network traffic, and, in some cases, gain access to the Internet or to corporate networks. Ask students if they have connected to the Internet through an unknown wireless network that a person or business had established and left unprotected. Note that there are stronger encryption and authentication systems available for wireless networks but users must install them. Many Wi-Fi routers ship today with pre-installed security protection.This graphic illustrates why wireless networks are vulnerable—The service set identifiers (SSIDs) identifying the access points in a Wi-Fi network are broadcast multiple times (as illustrated by the orange sphere) and can be picked up fairly easily by intruders’ sniffer programs.v

9 Malware (Malicious Software)for S1 Finance Prasetiya MulyaMay 2014Malware (Malicious Software)Computer VirusesMalicious software that are attached to another program to execute a particular unwanted function on a user’s workstationAffects a computer negatively by altering the way the computer worksWormsUse the network to send copies of itself to any connected hosts repeatedlyRun independently and spread quicklyUsing up resources and possibly shutting down the computer or networkVirusRogue software program that attaches itself to other software programs or data files in order to be executedWormsIndependent programs that copy themselves from one computer to other computers over a network.This slide identifies the various types of malware that threaten information systems and computers. Ask students if they have ever had a problem with a virus. Do they know how they got infected? Note that there are now more than 200 viruses and worms targeting mobile phones, and Web 2.0 applications such as MySpace and blogs are new conduits for malware and spyware. Malware is a serious problem—over the past decade, worms and viruses have cause billions of dollars of damage to corporate networks, systems, and data.Spread byDownloads (drive-by download), IM attachmentsDownloads on web sites and social networksv

10 Malware (cont’d) Trojan Horsefor S1 Finance Prasetiya MulyaMay 2014Malware (cont’d)Trojan HorseA malicious program that hides within or looks like a legitimate program, when in fact it is an attack toolThere are13,000 typesofSmartphoneMalwareTrojan HorseSoftware that appears benign but does something other than expectedThis slide continues the discussion of types of malware on the previous slide. Note that SQL injection attacks are the largest malware threat. Ask students why this is so. (These attacks enable hackers access to underlying databases that support Web applications, such as sales of products and services, e-commerce financial data, and other classified information. In other words, the database is where the information is located. SQL databases have little or no built in security once a hacker gets beyond the entrance point to a corporate network).SQL Injection AttacksHackers submit data to Web forms that exploits site’s unprotected software and sends rogue SQL query to databasev

12 Hackers and Computer Crimefor S1 Finance Prasetiya MulyaMay 2014Hackers and Computer CrimeA cybercrime is an online or Internet-based illegal actHackers vs. Crackers! (do you still remember?)System IntrusionSystem DamageThis slide looks at the people who commit computer crime, and at the various types of computer crime.Ask students what the difference is between hackers and crackers and if they agree with the differentiation. Have any students been the victim of computer crime or invasion of privacy?CybervandalismIntentional disruption, defacement, destruction of Web site or corporate information systemCybervandalismv

13 Spoofing and Sniffer Spoofing Snifferfor S1 Finance Prasetiya MulyaMay 2014Spoofing and SnifferSpoofingMisrepresenting oneself by using fake addresses or masquerading as someone elseRedirecting Web link to address different from intended one, with site masquerading as intended destinationThis slide continues the discussion of different types of computer crimes. Ask students what the ultimate purpose of spoofing and sniffing are. Note that there are legitimate uses of sniffing—sniffers can help identify network trouble spots or spot criminal activity on a network. Sniffers can also be used to identify copyrighted data being sent over networks, such as pirated music or video files.SnifferEavesdropping program that monitors information traveling over networkEnables hackers to steal proprietary information such as , company files, and so onv

14 for S1 Finance Prasetiya MulyaMay 2014Computer Crime“Any violations of criminal law that involve a knowledge of computer technology for their perpetration, investigation, or prosecution”Computer may be target of crime, for example:Breaching confidentiality of protected computerized dataAccessing a computer system without authorityComputer may be instrument of crime, for example:Theft of trade secretsUsing for threats or harassmentThis slide looks at the legal definition of computer crime and the two main classes of computer crime. The text lists a variety of other examples for computers as targets and as instruments of crime. Ask the students to provide more examples. According to the Ponemon Institute, the median annual cost of cybercrime for organizations in their study was $5.9 million. However, many companies are reluctant to report computer crimes. Why? What are the most economically damaging types of computer crime? (DoS, introducing viruses, theft of services, disruption of computer systems.)v

15 Types of Computer Crimefor S1 Finance Prasetiya MulyaMay 2014Types of Computer CrimeIdentity TheftTheft of personal information (credit card numbers, ID card, etc) to impersonate someone elsePhishingSetting up fake Web sites or sending messages that look like legitimate businesses to ask users for confidential personal dataEvil twinsWireless networks that pretend to offer trustworthy Wi-Fi connections to the InternetPharmingRedirects users to a bogus Web page, even when individual types correct Web page address into his or her browserClick FraudOccurs when individual or computer program fraudulently clicks on online ad without any intention of learning more about the advertiser or making a purchaseCyberterrorism and CyberwarfareThis slide continues the discussion of types of computer crime. Have any students encountered any of these types of crimes personally? Note that The U.S. Congress addressed the threat of computer crime in 1986 with the Computer Fraud and Abuse Act. This act makes it illegal to access a computer system without authorization. The text lists other legislation to counter computer crime, such as the National Information Infrastructure Protection Act in 1996 to make virus distribution and hacker attacks to disable Web sites federal crimes.This slide continues the discussion of types of computer crime. Note that cybercriminal activities are borderless: The global nature of the Internet makes it possible for cybercriminals to operate anywhere in the world. Ask students if there should be legislation outlawing click fraud. One concern is the use of computer attacks by organized governments, and that such attacks might target major infrastructure such as electrical grids. The text says that at least 20 countries, including China, are believed to be developing offensive and defensive cyberwarfare capabilities. One of the leading, if not the leading, countries in cyberwarfare is the United States.v

16 Internal Threats - Employeesfor S1 Finance Prasetiya MulyaMay 2014Internal Threats - EmployeesSecurity threats often originate inside an organizationInside knowledgeSloppy security proceduresUser lack of knowledgeSocial engineeringTricking employees into revealing their passwords by pretending to be legitimate members of the company in need of informationUnauthorized access is the use of a computer or network without permissionUnauthorized use is the use of a computer or its data for unapproved or possibly illegal activitiesThis slide looks at another source of security problems—people inside the company with access to the system. Ask students if they have ever worked somewhere with a vulnerable password system. Have they ever revealed to anyone what their password is or was? What are some solutions to password security? Some financial institutions assign users a new password every day, or every hour.v

17 Hardware VulnerabilityMay 2014Hardware VulnerabilityHardware theft is the act of stealing computer equipmentHardware vandalism is the act of defacing or destroying computer equipmentv

18 Software Vulnerabilityfor S1 Finance Prasetiya MulyaMay 2014Software VulnerabilitySteals software mediaIntentionally erases programsIllegally copies a programIllegally registers and/or activates a programPatches - SolutionSmall pieces of software to repair flawsExploits often created faster than patches can be released and implementedCommercial software contains flaws that create security vulnerabilitiesHidden bugs (program code defects)Zero defects cannot be achieved because complete testing is not possible with large programsFlaws can open networks to intrudersThis slide looks at security and other vulnerabilities caused by software errors that open networks to intruders. The text cites the example of a database-related software error that prevented millions of JP Morgan Chase retail and small-business customers from accessing their online bank accounts for two days in September Ask students why complete testing is not possible with large programs.The text also gives the example of Microsoft’s service pack upgrades to its operating system software. Service Pack 1 for Vista included security enhancements to counter malware and hackers.v

19 Business Value of Security and Controlfor S1 Finance Prasetiya MulyaMay 2014Business Value of Security and ControlFailed computer systems can lead to significant or total loss of business functionFirms now are more vulnerable than everConfidential personal and financial dataTrade secrets, new products, strategiesA security breach may cut into a firm’s market value almost immediatelyInadequate security and controls also bring forth issues of liabilityAsk students to give an example of how inadequate security or control can pose a serious legal liability. The text gives the example of BJ’s Wholesale Club which was sued by the U.S. Federal Trade Commission for allowing hackers to access its systems and steal credit and debit card data for fraudulent purchase.v

20 Establishing a Framework for Security and Controlfor S1 Finance Prasetiya MulyaMay 2014Establishing a Framework for Security and ControlInformation Systems ControlsGeneral ControlsApplication ControlsGovern design, security, and use of computer programs and security of data files in general throughout organization’s information technology infrastructureApply to all computerized applicationsCombination of hardware, software, and manual procedures to create overall control environmentSpecific controls unique to each computerized application, such as payroll or order processingInclude both automated and manual proceduresEnsure that only authorized data are completely and accurately processed by that applicationTypesSoftware controlsHardware controlsComputer operations controlsData security controlsImplementation controlsAdministrative controlsTypes:Input controlsProcessing controlsOutput controlsTo improve security for a firm’s information systems, it is important to create a framework that supports security. This includes establishing information systems controls, understanding the risks to the firm’s information systems, and establishing security policies that are appropriate for the firm. This slide looks at controls used in information systems. Remember that controls are methods, policies, and organizational procedures that ensure safety of organization’s assets; accuracy and reliability of its accounting records; and operational adherence to management standards. Controls may be manual or automated. Ask students to explain the difference between manual and automated controls (e.g., making sure that computer storage areas are secure vs. automated virus updates.) There are two main types of controls: general controls and application controls. General controls apply to all computerized applications. A list of types of general controls appears on the next slide. Ask students what the functions are of the different types of general controls.This slide lists the different categories of general controls. Ask students what the functions are of the different types of general controls.This slide examines the second type of information systems controls, application controls. Ask students what each type of application control does. (Input controls check data for accuracy and completeness when they enter the system. There are specific input controls for input authorization, data conversion, data editing, and error handling. Processing controls establish that data are complete and accurate during updating. Output controls ensure that the results of computer processing are accurate, complete, and properly distributed.)v

21 for S1 Finance Prasetiya MulyaMay 2014MIS AuditExamines firm’s overall security environment as well as controls governing individual information systemsReviews technologies, procedures, documentation, training, and personnelMay even simulate disaster to test response of technology, IS staff, other employeesLists and ranks all control weaknesses and estimates probability of their occurrenceAssesses financial and organizational impact of each threatThis slide looks at the role of auditing. An MIS audit enables a firm to determine if existing security measures and controls are effective.This graphic illustrates a sample page from an auditor’s listing of control weaknesses for a loan system. It includes a section for notifying management of such weaknesses and for management’s response. Management is expected to devise a plan for countering significant weaknesses in controls.v

22 for S1 Finance Prasetiya MulyaMay 2014Mitigation - FirewallA firewall is hardware and/or software that protects a network’s resources from intrusion. It also prevents unauthorized users from accessing private networksTechnologies includeStatic packet filteringStateful inspectionNetwork Address Translation (NAT)Application proxy filteringInternal Firewall = Inner FirewallExternal Firewall = Outer FirewallThis slide looks at an essential tool used to prevent intruders from accessing private networks—firewalls. To create a strong firewall, an administrator must maintain detailed internal rules identifying the people, applications, or addresses that are allowed or rejected. Firewalls can deter, but not completely prevent, network penetration by outsiders and should be viewed as one element in an overall security plan.Ask students to differentiate between the screening technologies listed here. Note that these are often used in combination. Ask students if they use firewall software on their own computers.v

23 Mitigation – IDS and Anti-x Toolsfor S1 Finance Prasetiya MulyaMay 2014Mitigation – IDS and Anti-x ToolsAnti-virus and Anti-spyware SoftwareChecks computers for presence of malware and can often eliminate it as wellRequires continual updatingIntrusion Detection SystemMonitors hot spots on corporate networks to detect and deter intrudersExamines events as they are happening to discover attacks in progressThis slide looks at additional tools to prevent unwanted intruders and software from accessing the network. Ask students what antivirus and antispyware tools they use. Ask why these tools require continual updating. Ask why UTM packages would include anti spam software.v

24 Securing Wireless Networksfor S1 Finance Prasetiya MulyaMay 2014Securing Wireless NetworksWEP security can provide some security by:Assigning unique name to network’s SSID and not broadcasting SSIDUsing it with VPN technologyWi-Fi Alliance finalized WAP2 specification, replacing WEP with stronger standardsContinually changing keysEncrypted authentication system with central serverThis slide looks at the tools and technologies used to secure wireless networks. Ask students with laptops what types of wireless security they have available to them, and which one they use.v

25 for S1 Finance Prasetiya MulyaMay 2014EncryptionTransforming text or data into cipher text that cannot be read by unintended recipientsTwo methods for encryption on networksSecure Sockets Layer (SSL) and Successor Transport Layer Security (TSL)Secure Hypertext Transfer Protocol (S-HTTP)Encryption is a process of converting readable data into unreadable characters to prevent unauthorized accessThis slide introduces the use of encryption to ensure that data traveling along networks cannot be read by unauthorized users. Ask students what encryption involves: use of encryption key (a numerical code) that is used to transform a message into undecipherable text. The cipher text requires a key to decrypted and read by the recipient.v

26 Two Types of Encryptionfor S1 Finance Prasetiya MulyaMay 2014Two Types of EncryptionSymmetric Key EncryptionSender and receiver use single, shared keyPublic Key EncryptionUses two, mathematically related keys: Public Key and Private KeySender encrypts message with recipient’s Public KeyRecipient decrypts with Private KeyThis slide discusses the use of encryption to ensure that data traveling along networks cannot be read by unauthorized users. Ask students to explain the difference between symmetric key encryption and public key encryption. (In symmetric key encryption, the sender and receiver establish a secure Internet session by creating a single encryption key and sending it to the receiver so both the sender and receiver share the same key. Public key encryption uses two keys: one shared (or public) and one totally private. The keys are mathematically related so that data encrypted with one key can be decrypted using only the other key. To send and receive messages, communicators first create separate pairs of private and public keys. The public key is kept in a directory and the private key must be kept secret. The sender encrypts a message with the recipient’s public key. On receiving the message, the recipient uses his or her private key to decrypt it. Ask students why public key encryption is stronger than symmetric key encryption. Note that the strength of an encryption key is measured by its bit length. Today, a typical key will be 128 bits long (a string of 128 binary digits).v

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